The Deposit Insurance Fund balance was $137.1 billion at the end of the fourth quarter of 2024, up $7.9 billion since June 30 of the same year, the FDIC said today in its semiannual update on the DIF restoration plan. In a related move, Acting Chairman Travis Hill said he has instructed agency staff to explore an alternative method of calculating the DIF’s exposure to losses.
The DIF reserve ratio increased from 1.22% to 1.28%, according to the FDIC. The agency projects that the reserve ratio remains on track to reach the statutory minimum of 1.35% by the end of the current year, well ahead of the statutory deadline of 2028.
The FDIC established the restoration plan in 2020 to return the DIF reserve ratio to its statutory minimum. The plan was later amended. Agency staff recommended no changes to the current restoration plan.
In a statement, Hill said the FDIC should consider whether insured deposits are the right metric to measure the DIF’s exposure to losses. He noted that in 2011, the FDIC moved away from using insured deposits to calculate a bank’s quarterly assessment to the fund, instead defining the assessment base as equal to total consolidated assets minus tangible equity, per the Dodd-Frank Act. The decision may have created “a mismatch in how assessments are charged and how the health of the DIF is measured,” he said.
One alternative permitted by law is to use the assessment base rather than insured deposits as the denominator of the reserve ratio, Hill said. “I have asked staff to analyze this option for future consideration.”
